Plans are underway to see to the sale of five government owned sugar millers in the next two years. This is seen as a good way to restore profitability in the companies and enhance competition in the sector.
The ministry will consider various options in the privatization including public-private partnerships, auctions and private treaties.
The sector has suffered continuous fragmentation which has led to the weakening of the sector with some firms closing down and farmers opting for other cash crops rather than sugar cane.
According to the Mumias East Member of Parliament, Benjamin Washaili, there has not been any political will to resolve the issues haunting the industry and that the government has overlooked the situation. He attributes the fragmentation of the sector to the government’s move to license more millers thus creating an unregulated battle for raw materials.
Out of 12 licensed millers in the country, the government owns five of them I.e. Nzoia, Muhoroni, Chemilil, South Naynza( Sony sugar) and the defunct Miwani.
The five mills have debts totaling to over Sh42 billion. They have been unable to compete with private millers due to low production.